Public Bill Committee

[Mr. Jimmy Hoodin the Chair]

Jimmy Hood: May I remind hon. Members that the Bill has been carried over from the last Session and reprinted to incorporate the amendments made by the Committee? Members should ensure that they are using the correct copy of the Bill, which is Bill No. 1 of the current Session.

Clause 36

Payment of housing benefit

John Penrose: I begto move amendment No. 267, in clause 36, page 29,line 40, leave out ‘may’ and insert ‘must’.
I welcome you back to the Chair, Mr. Hood, following our brief break. It is hard to resist the temptation to begin by saying, “As I was just saying”, after two or three weeks away for the Queen’s Speech, but I shall try.
The amendment is aimed at preserving the option of making direct payment of housing benefit to landlords without going via claimants, should that be necessary. The Committee had a useful and informative discussion—I think that there was cross-party agreement on this point—about the importance of trying to expand financial literacy and of deepening the level of bank account penetration among claimants of benefits in general and of housing benefit in particular. There is still great support for that proposition.
However, there are occasions when it would not necessarily be appropriate for some groups of claimants to receive housing benefit directly, and when it would be appropriate to pay the benefit directly to the landlord instead. Examples of those to whom it might be dangerous to make direct payments include drug addicts who are not yet recovered, who may be in the process of recovery from their addiction. For such people, the difficulty of dealing with financial affairs and, to them, comparatively large amounts of money, which arrive in one lump every week or so, will create an impossible degree of temptation that would be impossible to manage, given the chaotic lifestyle of people who are in the depths of addiction. Clearly, there are some groups of people for whom direct payment may not be appropriate. The amendment seeks to ensure that there will be a guaranteed facility to preserve the option of direct payments of housing benefit to landlords if necessary.
A number of landlords are very concerned about losing such an option as a way of receiving the benefit. They regard it as an essential piece of certainty and of protection of the rent stream. Many have said that they are concerned enough to consider getting out of the sector and stopping providing accommodation if the option of direct payment ceased.
The Opposition are therefore not asking that the proposed measure should apply to everybody. We completely support the notion that there should be an extension of bank accounts and financial literacy to the majority of people claiming housing benefit, but we feel that for some groups, at some stages, it will be important to maintain direct payment. We therefore hope that the Under-Secretary can give us some reassurance on the matter.

Danny Alexander: May I also welcome you back to the Chair, Mr. Hood, and say what a pleasure it is to be back here under your guidance for the final sittings of the Committee? I shall pass up the chance of making a meteorological reference at this stage—perhaps I will do so on Thursday for the Committee’s pleasure.
I would like to question the Under-Secretary on a further point that relates directly to the provisions that assist those who until now would have been likely to have their housing benefit paid directly to their landlord, but who might well be required under the new system to take responsibility for paying rent themselves, for all the reasons that the hon. Member for Weston-super-Mare has rightly outlined. That is an idea that I would support, subject to the caveats that he has entered.
In the pathfinder areas, significant resources have been provided to give financial advice, such as support from citizens advice bureaux, to enable people who are going through that transition, and are perhaps paying their rent directly for the first time, to cope with it. Advice and support will be provided to them, for example in the process of opening a bank account or taking advantage of other such payment mechanisms. As the local housing allowance is rolled out throughout the country, it is important that provisions for that sort of advice and support are made as intensively in the areas where the new benefit is being rolled out, as in the pathfinder areas.
Having talked to claimants and administrators in the pathfinder areas, I know that the provision of that advice and support, principally through Citizens Advice, has been a valuable part of the package to ensure a smooth transition from the old to the new benefit. There are also those claimants who are not vulnerable according to the new vulnerability assessment but none the less need a bit of help to get started in paying rent for themselves. I would be grateful if the Under-Secretary outlined the plans that the Government have to provide that sort of support and advice when the new local housing allowance is rolled out.

Anne McGuire: Thank you, Mr. Hood. It is a delight to be back here this morning. I have suffered withdrawal symptoms for the past two weeks when we have not been here, as I am sure all my colleagues have done. I missed the weather forecast from the highlands and islands—so much so, that I have been forced to listen to the shipping forecast at10 minutes to 1 in the morning on Radio 4, before hearing the in-shore forecast for fishermen. Anyway, that is enough of that. Those of us who were in the highlands and islands at the weekend know that when a force 10 gale blows, it can fair blow. We have great understanding and sympathy for those who are in the margins, in the more fragile areas, in terms of the weather, in the United Kingdom.
The hon. Members for Weston-super-Mare and for Inverness, Nairn, Badenoch and Strathspey have raised some positive points on financial inclusion. They have also highlighted the issue of those who are not able to manage their own funds. We agree that direct payment is not appropriate for all claimants. In the pathfinder areas, we put in place safeguards to ensure that, if a claimant could not manage their own affairs, payment went to the landlord. Having built that in in pathfinder areas, we would have the same intention when rolling out the programme, because it has worked well.
On funding during the roll-out, I am not sure whether we have yet received recommendations from the Select Committee on the Treasury, but I understand that it is looking at the issue of financial inclusion. I can confirm that we will provide funding alongside the local housing allowance roll-out to support local authorities in the provision of money advice. The pathfinder evaluation has demonstrated that the take-up of such advice was lower than we anticipated, so it may well be that people are more able and willing than expected to take responsibility, although the system has never given them that responsibility. Limiting the roll-out to new claimants and those moving house will help to ensure that the provision of advice is manageable. We recognise the operational issue that exists.
We need to continue to explore more coherent approaches to provide generic financial advice. It is not just a matter of rent or rates when people have serious financial difficulties: they are caused by a cocktail of financial pressures. Having said that, we ask the hon. Member for Weston-super-Mare to withdraw the amendment because it would restrict the Secretary of State’s flexibility in such matters. The issue that he raised is important, but we have built it into the system and the amendment would not add anything to the Bill. I am happy to put on the record the fact that we recognise that some vulnerable people are unable to manage their finances in quite the way that we would want them to. We have built in such support and, having highlighted such issues, I believe that the amendment could be withdrawn.

John Penrose: On the basis that the Under-Secretary has put on the record the fact that she envisages that an element of direct payment will be retained, particularly for vulnerable people, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36 ordered to stand part of the Bill.

Clause 37 ordered to stand part of the Bill.

Clause 38

DIRECTIONS BY SECRETARY OF STATE

Question proposed, That the clause stand part ofthe Bill.

Tim Boswell: I, too, welcome your return to the Chair, Mr. Hood. In the spirit of my hon. Friend the Member for Weston-super-Mare, I wish also to comment on the fact that we could use the words of Louis de Leon, a lecturer at Salamanca university who had tangled with the inquisition. He was imprisoned for five years and, on his return, he started his lecture, “As we were saying yesterday”, although he did say it in Latin.
On that basis, I am sure that I, too, might be allowed to make a short personal statement to the Committee although, during the interregnum, I have not been subject to a period of imprisonment or, indeed, cruel and unusual punishment. However, I have retired from the Opposition Front Bench and I assure avid Labour Members that I have not done so from a desire for a policy disagreement or even a particular sanguinary coup, but, as they say, it is to spend more—

David Ruffley: Will my hon. Friend allow me to say on behalf of all his colleagues on the Opposition Front Bench that we hope he comes back soon?

Tim Boswell: That is ingratiating and delightful. It may not be an offer that I would be entirely pleased to accept after 16 years, but there we are. I simply want to say that the Bill covers a hugely interesting subject. I welcome the Committee, the tone of which has been positive. Now let me get on with the points that I am anxious to make.
Given that we have moved on to the exchange of personal information, it is right that the Committee should pause for a moment to reflect on some issues. I have a strong interest in human rights and civil liberties, which I shall not rehearse at length. In fact, it is shared by many members of the Committee and we just need to get the provisions right.
For the avoidance of doubt, I wish to say that it is not wrong to provide for better data sharing in relevant areas subject to the appropriate safeguards. That is not the issue. The assurances that we seek from the Ministers are whether those safeguards are appropriate or sufficient. I wish to pick out three points that are, in a sense, generic to clauses 38 to 41. I want to receive the right assurances from the Under-Secretary about the lowest common multiple or the highest common factor. I notice that the hon. Lady is wrinkling her eyebrows. I shall explain what I mean.
Several different regimes are coming together, such as local authorities and different Government Departments, in a way that is set out coherently and clearly under the Bill. I am not arguing about that. They will all have different cultures and traditions about information sharing and protocols. Let us consider protection for people on benefits, many of whom will be vulnerable and who should not be put upon through their involvement with the benefit system. Whenever there is a meeting of protocols or doctrines, the solution that is selected must provide the highest possible degree of confidentiality and protection to the citizen, rather than the lowest common factor on which they can all agree. I would therefore like the Minister to say that we now need a regime where safeguards are, if anything, enhanced and there is no weak link in the system.
The next point is that we should ensure that the system is looked at as a whole, in terms of training and the exchange of information about practices—I am not talking about individual cases—between the various participants. Misunderstandings arise when there is a central doctrine and access to central computer system and other people are outside that but may have access to the gateway for specific reasons. It is important that the local authorities talk.
The Under-Secretary will be familiar with the fact, through the Department’s own practice in local benefit payment reviews that are reported to this House, that there is already a dialogue. I am simply saying that, first, we do not want any weak links in the system of protection for the individual in terms of the formal safeguard set out in these clauses. Secondly, we want as far as possible for everybody to adopt a similar and protective approach.
The Under-Secretary will reasonably say that all this is within data protection rules. She will also draw attention to the clause that imposes criminal sanctions on the misapplication of information. I take the view that the criminal law is not something that should be invoked unless there are extreme reasons for it. There are cases where public officials misuse information for malign and corrupt purposes but they are not by any means common or typical. It is far more likely that there is a great deal of over-enthusiasm or cutting of corners under pressure of work, but the law is equally important in protecting the citizen in that.
The criminal law is an important sanction and it should be there. But on top of that is the question of operation in practice. I do not know whether the Under-Secretary has given any thought to this, and I have not rehearsed it with my Front-Bench colleagues, who may take a different view, but it may be useful if someone kept an eye on the process as it works in practice—someone outside the system, outside the Department and outside the payment of benefits.It may be a natural role for the Information Commissioner to look at how it works, to ensure that nobody is abusing the system and that it is not being stretched beyond the purposes that are tied down in these clauses. If we can have those assurances, the Committee will not have wasted its time. These changes should be made and it is equally wrong that they should not be safeguarded.

Anne McGuire: On a point of order, Mr. Hood. I am seeking your guidance at the moment because there has been some confusion. I am prepared to answer the hon. Gentleman’s point, but I suspect that he is talking about old clause 38, which is now clause 40. I am struggling with what I should do and whether or not you will offer me appropriate advice.

Tim Boswell: Further to that point of order, Mr. Hood, I understand. It became clear to me when I picked up the wrong copy of the Bill. There were reasons for that, which I need not go into now but I am indeed talking exactly on those points and I am happy, with your guidance, to receive a response from the Under-Secretary—either now or at the appropriate moment.

Jimmy Hood: If it will help hon. Members, we will deal with clause 38 stand part now, and if we want to vote on clause 40 stand part when we get to it, we shall do so.

Anne McGuire: Thank you, Mr. Hood. The hon. Gentleman does not normally flummox me but he did today and I thought that perhaps this was not the clause that I was about to speak to.

Jimmy Hood: I have to apologise to the Under-Secretary. I will now put the question on clause 38 and later she can reply to the stand part debate onclause 40.

Question put and agreed to.

Clause 38 ordered to stand part of the Bill.

Clause 39 ordered to stand part of the Bill.

Schedule 5 agreed to.

New Clause 8

Non-dependent deductions
‘(1) The Secretary of State shall make regulations such that the non-dependent deduction for—
(a) housing benefit;
(b) council tax benefit; and
(c) Local Housing Allowance
shall be nil where the non-dependent—
(i) is in non-remunerative work, or
(ii) has a gross income from remunerative work of under £101.00 per week.’.—[Danny Alexander.]

Brought up, and read the First time.

Danny Alexander: I beg to move, That the clause be read a Second time.
I endorse many of the comments made by the hon. Member for Daventry and I look forward to hearing the Minister’s response in due course. May I say how much, in my brief time in the House, I have valued the hon. Gentleman’s contribution from the Front Bench? I look forward to that continuing from the Back Benches too.
New clause 8 is designed to elicit a debate and probe in a bit more detail the Government’s thinking about the non-dependent deductions regime for housing benefit and other benefits. The thought behind it, supported by evidence from Shelter and Citizens Advice, among others, is that the current non-dependent deductions regime causes problems for claimants from time to time and significant reform is needed. Reform of the non-dependent deductions regime has been considered before. It may be of interest to Labour Members, some of whom were not around at the time, that when in opposition the Labour party raised a number of concerns about it. In 2000 the Government’s housing Green Paper, “Quality and Choice: a decent home for all” proposed the simplification of non-dependent deductions. Of the 103 organisations and individuals who responded to the consultation paper, only five raised objections.
It may be worth discussing briefly the problemsthat can be caused by the present non-dependent deductions regime. In some circumstances it can lead to rent arrears and consequential hardship, and perhaps even eviction and homelessness. It can also, which is an important point in the overall context of the Bill, create disincentives to work. In my constituency casework I have had experience of the regime causing all those problems, except eviction. Other hon. Members may have broader experience than that.
The idea behind the non-dependent deductions regime is that non-dependants living in a person’s house, such as grown-up children, should make some contribution toward the rent. One might ask who could argue with that. In many cases that would be a fair point, but there are certain categories of claimants for whom the current regime causes problems. The regime has a minimum non-dependent deduction, which at this year’s rate amounts to £7.40. The deduction is banded according to income and the highest rate of non-dependent deduction goes up to £47.75, but where no evidence of the income of the non-dependant is provided, the deduction takes place at the highest rate. 
The Department for Work and Pensions has conducted some research on non-dependent deductions and who claims them, but that research is rather out of date as it is 10 years old. Is the Minister happy to agree that further research should be carried out to update the figures? For example, 52 per cent. of claimants for the non-dependent deduction were aged 60 or older and the average age was 58. Clearly, those figures apply to a wide range of categories of people, but mainly—probably—to those with children who have grown up or are growing up, or adult non-dependants, such as spouses or partners.
A problem arises—certainly it did in relation to a constituency case with whom I have dealt—when the non-dependant is a child and the parent is the claimant. Whether or not they are on benefits—my constituent claimant was on other benefits—the parent has to seek from the non-dependant some of the money to make up the difference, if they do not wish to suffer a reduction in living standards or a shortfall in their rent. In that case, if the minimum amount applies, £7.40 would be required from the non-dependant to meet the shortfall. Citizens Advice found that where the non-dependant is a grown-up child under the age of 25, it can be very difficult for parents to get the money to meet that shortfall.
Obviously, I am anxious to hear the Minister’s response to the concern that the rules, which are in place for very good reasons in the vast majority of cases, are, in a minority of cases, causing hardship, can cause rent arrears and might even in extreme circumstances lead to an eviction. That is disruptive for the individuals concerned, and in some cases for families.
My amendment reads:
“The Secretary of State shall make regulations such that the non-dependent deduction...where the non-dependent...is in non-remunerative work, or...has a gross income from remunerative work of under”
a certain amount should be nil, so that if the non-dependant is either living on benefits or has no, or a low, remunerative income, the housing benefit would be payable to the claimant in full. That is an attempt to get around some of the problems. I appreciate that that might not necessarily be a perfect solution, but I wanted to identify in this debate the fact that in some categories of case there are quite serious problemswith the operation of the current rules. I encouragethe Minister to update the Committee on the Government’s latest thinking on that matter.
Let me return to the Government’s response to the Select Committee on Social Security in 1999-2000. The Committee recommended that
“the number of rates of non-dependent deductions is substantially reduced, and that this should be accomplished by abolishing the higher rates of deduction”.
In their response, the Government said:
“The Government acknowledges that the present scheme does increase complexity and that the highest rates of non-dependent deductions may, in some cases, exceed total rent liability. There would of course be costs arising from abolishing the highest two rates....The Housing Green Paper put forward the idea of simplifying non-dependent deductions and the consultation responses will need to be considered before a decision is made about making any changes.”
At that stage the Government’s thinking seemed to betray a degree of awareness of the problems that the current regime can cause in a minority of cases. I would be grateful if the Minister could inform the Committee of whether under the new local housing allowance that issue could be looked at again.

David Ruffley: Good morning, Mr. Hood. It is a great joy to see you again after such a long break.
I hope, Mr. Hood, that you will not have to witness the scenes that some of us had to witness in the Chamber, not once but twice. At oral questions to the Department for Work and Pensions, there were dangerous signs of a breakdown in the valuable consensus that has been displayed in Committee. Ministers were actually criticising Opposition Members, quite openly and on the record. [Laughter.]
The debate yesterday afternoon started badly and then got worse. I am glad those scenes, which took place during the winding-up speeches, were after the9 pm watershed because children should not have been watching. There were sneering and barracking noises from Government Members in a pathetic attempt to put off my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond). I really hope that we do not see scenes like that in Committee today.

Jimmy Hood: I am sure we are getting round to the new clause.

David Ruffley: I am merely trying to rebuild the consensus and remind hon. Members on both sides of the divide of that. There is still sedentary chuntering from the hon. Member for Glasgow, North-West, but that is part of the great glory of the Committee. All shades of opinion are welcome here under your excellent chairmanship, are they not, Mr Hood?
Let us move on to the business of the clause. This important and probing amendment owes much to the excellent work, campaigning and lobbying done by Shelter and Citizens Advice. For Members of Her Majesty’s loyal Opposition, the amendment is important for two reasons. First, the area of non-dependent deductions is complex and Opposition Members and—I think—Government Members want benefit simplification higher up the agenda, mainly because it will help customers, many of whom are the most vulnerable in society. Secondly, the amendment would streamline Government business and make it more efficient and cost-effective.
The current regulations discourage housing benefit claimants from allowing friends and adult relatives on benefits and low incomes to reside with them. In extreme cases, that may result in eviction, but I do not think there is any great evidence of that, so we are not scaremongering. However, the regulations may well encourage under-occupation of housing units, particularly social housing.
The thrust of the regulations is based on an unassailable proposition that non-dependants with a reasonable income should be expected to contribute to the cost of their housing. No one disputes that. However, the current requirements and rates at which non-dependent deductions are applied can cause hardship either to the non-dependant or the claimant. What concerns us, and I am sure Government Members, too, is the work disincentive effect. Another concern is the possible impact in terms of family breakdown, which is why the modern Conservative party is looking at the area of non-dependent deductions afresh and with renewed interest.
My right hon. Friend the Member for Witney (Mr. Cameron) has, in a modern way—not in a traditional, tub-thumping, right-wing way—talked about the importance of the modern family and about the way in which family units no longer have to have a marriage certificate attached to them. Keeping families together is an important part of any Government’s public policy, and it is a very important part of the benefits system as well. Sometimes the system can keep families together and sometimes it can keep them apart. I suspect that the new clause teases out the problems that some families have in relation to non-dependent family members. Quite often the elder member of the family will be claiming housing benefit, and we can see that there is a disincentive in keeping that non-dependant in the household because of the way that the regime operates.

Jeremy Hunt: I, too, welcome you back to the Chair, Mr. Hood.
Does my hon. Friend share two of my concerns about non-dependent deductions with respect to work disincentives? First, the statistics are very clear about the greater incidence of child poverty in workless households. In such a non-dependent deductions regime, there is a clear disincentive for someone else living in the household to take work. There is therefore a risk of increasing the number of workless households, which has a direct impact on child poverty.
Does my hon. Friend also share my concern about the possible impact on carers for disabled people? If a carer is living with a disabled person, that carer might also have a strong disincentive to work because of the non-dependent deductions. Does he share those concerns, and does he think that they might be another reason why the new clause should be taken very seriously?

David Ruffley: I do indeed share my hon. Friend’s concerns about the impact, both in relation to disabled people and on child poverty. I think that I am right in saying that slightly fewer than three out of four children in single parent workless households are in poverty, whereas only one in eight children in single parent working households are in poverty. Ministers would not disagree with those figures. As they have a 2020 child poverty reduction target, I know that they are seeking to tackle those figures and to halve them by 2010. We sign up to those aspirations, but it is certainly the case—
The Minister for Employment and Welfare Reform (Mr. Jim Murphy)indicated dissent.

David Ruffley: Target or aspiration—whatever. We sign up to those propositions, but to get from where we are now to the 2020 target and to the first milestone at 2010, we must all understand that the decisions made by the Government will have an impact on our ability to meet that target. That is why the new clause is extremely important. My hon. Friend the Member for South-West Surrey makes an excellent point.
My first area of concern is benefit complexity. It contributes to delays and cases of maladministration, but above all—this is the key point for us now—it creates confusion for claimants, many of whom are vulnerable and who will sometimes be in distress. The confusion and uncertainty about how the quite complicated rates and different levels operate can worry the non-dependant, who wishes to stay in a family house or flat, as well as the housing benefit claimant him or herself. That confusion is compounded by the knowledge that failure to provide evidence of a non-dependant’s income will result—without any ifs or buts—in the top rate deduction of £47.75 being applied straight away, which seems quite a harsh principle.
Will the Under-Secretary first explain the rationale for that sanction? I do not think that there is any other word for it. One must remember that individuals might not be able to provide accurate evidence, or any evidence at all, of a non-dependant’s income, for perfectly understandable reasons. In explaining the rationale for why that top rate deduction is applied in such circumstances—where evidence is not fully forthcoming—will she say whether there are any derogations, such as mental illness, which might be just cause for not disclosing that information? If such a good reason is given, could the £47.75 hit be avoided? That is quite an important point.
On complexity, it is worth reading into the record that quite a lot of rates are involved for non-dependent deductions. My second question to the Under-Secretary is why the rates start at the top with £47.75, then descend to £43.50, £38.20, £23.35, £17 and finally £7.40? We understand a deduction regime is needed, but will she explain why there are so many rates?
I hope that the Minister will also fully answer my second question, which was: has she had any discussions with her hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt), the Under-Secretary of State who is responsible for benefit simplification? If she has not discussed with her fellow Minister why there are so many levels of benefit, I ask her to explain why not, because it is an area that is ripe for simplification. We say yes to the principle of deductions, but why are there so many rates?

Tim Boswell: My hon. Friend must now get used not only to criticism from in front but occasionally even withering—[Interruption.]

Jimmy Hood: Order. Ministers on the Front Bench may need to confer, but if I can hear them they are conferring too loudly.

Tim Boswell: I will be brief, Mr. Hood, so as not to excite them. I simply want to say to my hon. Friend that if there are a series of benefit rates there are, by definition, steps, with which he will be familiar from his work in the Treasury. There are important marginal implications when people cross each of those steps and that contributes to the pattern of disincentives, which worry my hon. Friend and me.

David Ruffley: My hon. Friend makes an important conceptual point, which we come across in the parallel area of tax simplification. There are often very good reasons why tax codes and tax legislation are so detailed: they are protecting the Chancellor of the Exchequer’s revenue base on which we all rely. Were that base not protected we would not have the revenue, the tax pounds, to pay for all the public services. It is always a case of striking a balance. In the case of these benefit levels, my hon. Friend says that there must be no sharp cliff edge in terms of the marginal effect, but it would be useful to understand why there are so many rates for deductions. None the less, I will simplify the question about simplification and ask the Under-Secretary to tell us, without going into the theology of marginal rates and cliff edges, whether she has had any discussions on the issue with her hon. Friend the Member for Warwick and Leamington?
My third question for the hon. Lady is on a matter that puzzles me. It is a “techy” point, which is also made by Shelter and Citizens Advice, but we should have a reply to it. Under-25s who are in receipt of income support or income-based JSA are exempt from NDDs, but those in the same age group claiming contribution-based JSA, paid at the same rate, are not. My simple question for the hon. Lady is: why?
Income support and JSA claimants, both income and contribution-based, aged over 25, attract an NDD of £7.40 a week, which is the lowest deduction, but that means that NDDs can still push people below minimum income levels and into poverty. Those benefit claimants are expected to contribute towards the rent from their benefits when they would not be required to do so if they held their own tenancy, which prompts another important question for the hon. Lady. There is a perverse incentive in that people might be better off if they found their own tenancy and made their own housing benefit claim at a far greater cost to the taxpayer, rather than not finding their own tenancy, not claiming a large slug of housing benefit and instead lodging or taking a room in a family home or with a friend or relative. Have the hon. Lady and her Department done any research on that question?
Should we not encourage better and more efficient use of our housing stock? Would not an answer to that question help to tease out what is going on? Is it the Government’s policy to encourage greater occupation or to drive people into finding their own tenancies at inconvenience to them—they might not want the responsibility of their own household unit—not to mention the extra cost to the taxpayer of a new housing benefit claim for a brand new tenancy?
The spokesman for the Liberal Democrats referred to the age of the last DWP research on NDDs. I shall not say that it was done when dinosaurs stalked the earth, but it was 10 years ago, and that is a long time in governmental terms. I do not have the advice of numerous brilliant civil servants, advisers and speechwriters that Ministers have; I have only my basic research, which says that the most recent DSS and DWP research into NDDs is the 1996 DSS research report No. 43, “Paying for Rented Housing”. How long it seems since that report, and the days when the Major Administration was constructing its golden economic legacy, a legacy from which the Labour Government benefits in no uncertain way.
For the record, that research, albeit 10 years old, found that 52 per cent. of claimants of an NDD were aged 60 or over—that is a high figure; more than half—that the average age of all claimants was 58, and that 48 per cent. of claimants survived on income support. Touching on the point about which my hon. Friend the Member for Daventry speaks with such authority, 11 per cent. were sick or disabled—the study said parenthetically that that was believed to be an underestimate—and 71 per cent. were either aged over 60 or disabled, lone parents or on unemployment benefits. The 1996 study also looked at the profile of non-dependants and found that the average age of non-dependent children of claimants was 28 and that of brothers or sisters was 55.
Those figures illustrate the fact that NDDs are more likely to affect the elderly and people who are in receipt of other benefits. The departmental data are supplemented by troubling data from Shelter and Citizens Advice. Their advice centres find evidence of family formation being undermined. They report that the application of NDDs to JSA and income support claimants causes problems for the housing benefit claimant in two ways. First, housing benefit claimants with adult children often find it difficult to recover the expected contribution from those children, leaving them with no choice but to ask the children to leave or to meet the shortfall from their own incomes. We can imagine that that can lead to difficulties in families. The second problem that the advice centres have discovered is that claimants might allow a friend, rather than a relative, to stay but find out later—when the friend has moved on—that they have been overpaid and anNDD has been applied retrospectively. In those circumstances, the housing benefit department will attempt to claw back the overpayment. It can be difficult for the host to recover a large sum from the friend who was staying if he is receiving only the low income that benefits provide.

Tim Boswell: In the spirit of the exchanges at DWP questions yesterday, does my hon. Friend agree that if it is difficult for the Department, with its debt recovery organisation, to make much inroad into overpayments centrally, it is particularly difficult under the present rubric for a council housing benefit department to recover overpaid benefits in a world in which people move on and change location?

David Ruffley: My hon. Friend makes an excellent point, to which the Under-Secretary might like to respond. Overpayments like those often result in rent arrears, with the possibility of eviction for tenants. That is not desirable.
I should like to make a short excursion into recent history and remind the Under-Secretary that, when in opposition, the Labour party raised concerns about the non-dependent deduction regime, and later did more than that. When it got into Government, the Labour party considered the matter quite purposefully, by all accounts. In 2000, the housing Green Paper, “Quality and Choice: a decent home for all”, proposed the simplification of NDDs, and 103 of the individuals and organisations that responded to the consultation paper supported their simplification or reform. Five respondents apparently disagreed with simplification.
In the 1999-2000 Session, the Select Committee on Social Security held an inquiry into housing benefit and recommended that the number of rates of non-dependent deductions should be substantially reduced, and that that reduction should be accompanied by abolishing the higher rates of deduction—which refers back to a point I mentioned earlier. In its response to that Committee recommendation, the then Department of Social Security stated:
“The Government acknowledges that the present scheme does increase complexity and that the highest rates of non-dependant deductions may in some cases exceed total rent liability. There would, of course, be costs arising from abolishing the highest two rates. The Housing Green Paper put forward the idea of simplifying non dependant deductions and the consultation responses will need to be considered before a decision is made about making any changes.”
To repeat the point, in spite of what seemed overwhelming support from the respondents to the consultation, in December 2000, Ministers announced that they were not taking forward options to simplify NDDs. To ask a simple question, in the spirit of honest inquiry, about something that happened before the Under-Secretary’s time in the Department: why? A lot of valuable work was done by her predecessors after the 1997 election and many important noises were made, particularly on benefit simplification. This was not my bedtime reading in 1999 and 2000, so I come into this area with a relatively fresh mind—well, certainly a mind; I am getting on in years, so I am less fresh than I used to be—and I am puzzled by the basis for the policy decision by the Department not to proceed with what look like sensible benefit simplification measures. I should have thought that such measures would have benefited those operating and administering the system and, most importantly, the customers on the receiving end—those requiring the help that they clearly deserve.
Shelter and Citizen’s Advice, which have done a lot of work on this matter, have helpfully sketched out three main runners as options for reform, which I shall place on the record. We know that each one has a price tag, so I do not want the Under-Secretary to say that this is a spending commitment from Shelter, Citizens Advice, the Liberals or the Conservative Opposition; they are options offered in the spirit of genuine inquiry. Putting aside the price tags, could she tell the Committee whether any or all of the three propositions are being considered with a view to simplifying and improving this area of the benefits system?
The first proposition is that no NDDs should apply for non-dependants in receipt of income support or jobseeker’s allowance. Currently, only under-25s receiving those benefits are exempt. Has the Under-Secretary considered that? If she has done so and rejected it, that is fine, but it would be useful to know for the future whether we are barking up the wrong tree. According to a written answer of 27 February this year, the DWP estimates that such a change would cost £22 million per year.
The second proposition is that total NDDs should be capped at 50 per cent. of the rent. Currently, some claimants with more than one non-dependant living at home have more than 50 per cent. of their benefit deducted. The DWP estimate of the price tag for that is £37 million a year. I stress, however, that I do not wish the Under-Secretary to get hung up on price tags at this stage; we are just discussing the principles.
Thirdly and finally is the proposition from Shelter and from Citizens Advice that the two highest rates of non-dependent deduction—those at £47.75 and £43.50—should be abolished. That proposition was prefigured in the musings of the Under-Secretary’s ministerial predecessors at the turn of the millennium. According to DWP estimates that would incur a cost of £10 million a year.
I thus conclude my peregrinations around NDDs. I hope that the Under-Secretary will answer some of our questions, which were asked in a spirit of honest inquiry and probing and have excited the attention and interest in particular of Citizens Advice and Shelter, to whom I am greatly indebted for their briefing and informative advice.

Anne McGuire: I did not realise how much I had missed the hon. Gentleman, and the magic word “parenthesis”. I am fascinated by his wish to put aside the price tags for the matters to which he refers. That makes us utterly confused sometimes.

Kali Mountford: Suspicious.

Anne McGuire: Suspicious, as my hon. Friend says. We are not sure whether the Opposition are raising a concern, making a commitment or just chuntering on in the way that the hon. Gentleman accused my hon. Friend the Member for Glasgow, North-West of doing. I am not at all surprised that they want to put aside the price tag for anything, given the devastating performance yesterday of the Chancellor of the Exchequer, when he pulled apart the spending commitments that the Opposition have already made.
With that little frisson of excitement by way of introduction, I shall—

Jeremy Hunt: Proceed more gently.

Anne McGuire: Proceed more gently. That is right.
The debate has been interesting, and we have had discussions around a subject that I know causes great concern to some. I hope, however, that I can persuade the Committee that the Government are on the right track. By way of preamble, as opposed to peroration, let me say that we have considered the points made by the various organisations. However, I stress that we are dealing with adults in households, because an underlying impression seems to have been created that we are concerned with dependent children. We are not.
As far as the Minister for Employment and Welfare Reform and I can see, there is no impact on child poverty in relation to the proposals. I appreciate that the eradication of child poverty, as opposed to the creation of it, is the new commitment of the Conservative party, but in our honest opinion there is no impact on our eradication policy, nor on our strong commitment to that policy. The point is whether adults in a household can rightly be considered to make a contribution to the household income.

Jeremy Hunt: Can the Under-Secretary clarify something that I might not have understood about non-dependent deductions? Suppose a non-dependant is living in a household with someone who is claiming housing benefit, and they have a child. The concern about child poverty is that the non-dependent deductions might discourage the other person from seeking work and therefore increase the number of workless households. Can she clarify that?

Anne McGuire: I know there has been a bit of a break since the earlier part of our consideration of the Bill, but its general thrust has been about supporting people into work. To deal with some issues that have rightly been raised on child poverty, I do not accept the hon. Gentleman’s primus that somehow that will impact on our policy of eradicating child poverty. We must recognise that we are saying to adults within a household where there is income that there is a responsibility to contribute to the general household income.
I appreciate all the difficulties raised, in that sometimes it can be difficult to get an adult child—we are talking here about people over the age of 25—to make that contribution, yet I dare say that when some of us went out to work and got our first pay packet, the first thing that happened was a parent insisting that we make a contribution to the household. That may not have been a great deal of money, but it was recognition that we were inside a family community where a contribution had to be made. That is a very good principle—a good socialist principle, I dare say.

Danny Alexander: I am grateful to the Under-Secretary for giving way when we have just heardthe word “socialist” spoken by someone on the Government Benches—something we have not heard in some years. It may be a response to the new, modern Conservative party.

David Ruffley: Will the hon. Gentleman give way?

Danny Alexander: I am not sure that I can when I am making an intervention. [Interruption.]

Jimmy Hood: Order. I am hearing a cross-conversation here.

Danny Alexander: Thank you, Mr. Hood. The Under-Secretary made the point that we are talking about only people over 25 here, but we are not because for some reason—perhaps she can clarify this—under-25s in receipt of contribution-based jobseeker’s allowance have non-dependent deductions applied to them. It would be useful if she explained that.

Anne McGuire: I probably stand corrected on that point, and I will come back to it. I want to deal with some of the real issues raised in the debate, and I hope to assuage some of the fears that have been highlighted. As I said in my opening comments, we think it is right that if someone is living in someone else’s house, they should contribute to the housing costs. I draw the parallel that people on income support who are home owners have to manage all their financial outgoings, including bills and so on. Why, then, is it being said that if someone lives in the household, as described here today, they should not contribute to meeting those costs? We think that asking that question is consistent with our rights and responsibilities agenda.
I repeat that we are talking about adults here. I do not want our discussion to be muddied by any possible appearance, which I appreciate may have been unintentional, that we are talking about children. If the non-dependent person is on income support, or on income-based JSA, and under 25, no deduction is taken into account for that individual.

Jeremy Hunt: The last time that I made repeated interventions, the Under-Secretary said that I was trying her patience. Obviously, in our new consensual spirit, I would not wish that to happen, but I would still like a little clarification. Given that one working-age disabled person in three has children, if such a person were claiming housing benefit and had a partner living with them, who could cause a non-dependent deduction to be made? Does she not agree that, in that situation, there is a concern that the non-dependent deduction acts as a disincentive to that partner working? That could therefore indirectly increase the number of workless households. That is our concern and why we are pressing her on child poverty.

Anne McGuire: The hon. Gentleman is not trying my patience this morning. He has made a reasonable intervention, but with the greatest respect it is oftenthe case that if one element is taken out of a whole approach, a conclusion can be drawn about disincentives. I ask him to look at not only the housing benefit regime, but all the other elements—not only the Bill, but the tax credit system and so on.
I could go through the whole gamut of our policies, which support people going into work and sustain them in work. If the hon. Gentleman looked at all those measures, he would perhaps get a more realistic picture of what we are doing to support people in that respect.
I return to the point I made earlier, which is that the Minister for Employment and Welfare Reform and I think that drawing the issue of child poverty across this debate is not particularly helpful. It is not relevant, and if I was in a more tetchy mood I would say that it is a red herring.

Jeremy Hunt: Will the Under-Secretary please give way?

Anne McGuire: No, I am going to deal with some other points. Forgive me, but I cannot remember which Member raised the issue of carer’s allowance; it might have been the hon. Gentleman. If the carer is a member of the household—the unit of assessment—the carer’s allowance will be taken into account, but the claimant of the housing benefit will receive a carer’s premium as part of their housing benefit claim. That is what I mean when I say that we cannot look at just one part of the system—there is a holistic approach to support. I appreciate that sometimes it may appear to be fragmented, but it brings together a whole range of support in terms of the household income. There is a carer’s premium within household benefit, which deals with some of the issues raised on carer’s allowance. I hope that that has attended to the issue of disabled people with carers.
The hon. Members for Inverness, Nairn, Badenoch and Strathspey and for Bury St. Edmunds asked about a simpler scheme with fewer deductions. We must recognise that one person’s bureaucracy can be another’s sensitivity. We must recognise that. Quite fairly, in highlighting the issue in the Green Paper pre-millennium and looking at the development of our policy post-millennium, we recognised that if we reduced the number of bands, the system would be less sensitive to individual circumstances. We feared that if fewer deductions were imposed over a given income range, which I believe is the thrust of the new clause, that would create winners and losers. Our assessment is that life would be made worse in terms of housing benefit support because the bands would be wider, so any change in the rate of reduction would be greater than the change in income.
So, in trying to deal with a simplification issue—as an aside, Ministers in the Department constantly talk about simplification because it is one of our priorities—we feel that, in this case, if we compressed the bands in terms of numbers but extended the range, there would be more losers than winners. That would be to the disadvantage of the individual. It is often difficult to be sensitive in an enormous system such as housing benefit or the benefits system in general, but we try to differentiate and to pick up some sensitivities. 
That is why—this goes back to the comments made by the hon. Member for Bury St. Edmunds—many of our benefits have a range within them. Disability living allowance has higher, medium and lower; carer’s allowance and JSA also have a range. All the way through our benefits system, we try to recognise that not everybody needs the same support and that people need to be assisted in a slightly different way financially than could be managed if we went for an approach of total simplification.

Danny Alexander: The Under-Secretary is making an important point about the need for the benefits system to be sensitive and finely tuned to the range of concerns that might be present in a particular benefit. However, in this case, the new clause suggests a zero rating for the non-dependent deduction for people who have no remunerative income. That could be seen to increase the sensitivity of the benefit system. If the non-dependent person had a low or zero income, applying the deduction could cause greater hardship and so could be seen to be more, rather than less, insensitive.

Anne McGuire: I shall come back to that when I try to pull all the points together.

Tim Boswell: Is it not the logic of the Under-Secretary’s argument—although we do not always have to follow logic to its ultimate conclusion—that one should not have bands at all and that the deduction should simply be income related on the basis of a sliding scale?

Anne McGuire: The hon. Gentleman, as usual, has put his finger on the pulse of the issue. I am sure that my hon. Friend the Minister for Employment and Welfare Reform will say something to him, on behalf of both of us, when we reach clause 48, but I do not want to take up the Committee’s time just now.
As I was saying, I shall come back to the previous point when I try to pull all this together. The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked whether we have any plans to reform non-dependent deductions. It is fair to say—I hope the Committee recognises this—that we have looked constantly at how we keep under review the provisions of the benefits system. We intend to amend the provisions for the local housing allowance where a person could be a non-dependant of more than one occupier. Instead of the existing process, which is probably unnecessarily bureaucratic, where the deductions are portioned between a number of occupiers if somebody is moving between two or three households, the whole deduction will be made only in the calculation of the first occupier who notifies the local authority.
I hope that I have dealt with the issue of simpler schemes with fewer deductions. That links in with a point raised by the hon. Member for Bury St. Edmunds on the simplification of non-dependent deductions. From October 2003, if the householder or their partner is aged 65 or over and a non-dependant moves in to their home, or existing non-dependant circumstances change and increase the deduction, we have not started the deduction or the increase until 26 weeks have passed. We take into account, for example, short-term visits to mum, dad or friends.
There is another important issue. I am sorry that the hon. Gentleman has had to leave us for a few minutes, because it links into the issue that he raised about older people and those receiving pensions. If the non-dependant is on pension credit, no deduction is made.
I shall deal with a point raised by the hon. Gentleman on the non-dependent deductions and income support, and why the measure kicks in at the age of 25. As has been highlighted, we do not implement any deduction for claimants between the ages of 18 and 24 who are in receipt of income support or income-based jobseeker’s allowance. After the age of 25, only the minimum deduction is applicable, which reasonably reflects the levels of benefit for those in that age range.
That reflects the fact that allowances for those on benefits rise at the age of 25 by £11.95 a week. Returning to our responsibility agenda, it is reasonable to expect that someone over the age of 25 who is in receipt of an income, albeit through income support or jobseeker’s allowance, should make a contribution to the household in which they live.

Danny Alexander: It is important to flesh out the point about under-25s. Can the Under-Secretary explain why NDDs should be applied to under-25s on contribution-based JSA but not those on income-based JSA? Does that not throw up a potential anomaly for an individual who is entitled to either income-related or contribution-based JSA? He will choose the higher amount, and if that is contribution-based JSA and he then has an NDD applied, his allowance might be reduced to below the level of the income-related JSA to which he would otherwise have been entitled. Having elected to take contribution-based benefits, the individual might receive less benefit overall because the NDD has been applied to him.
That is also the case for somebody who is not in receipt of benefit or has had his benefit sanctioned. If an under-25 has lost his JSA owing to a benefit sanction and is a non-dependant, although there is no NDD while he is in receipt of benefit, the effect of his benefit’s being sanctioned is that the person on whom he is dependent also has his benefit sanctioned, so a double sanction is going on. From the point of view of the person on whom the under-25 is dependent, that is a particularly negative situation.

Anne McGuire: There were so many negatives and double negatives in the hon. Gentleman’s question that I can only hope to give him a definitive answer. However, if I cannot do so, I shall deal with that specific example in writing. I do not usually like to do things that way, but this is a complicated matter and I should not want either of us inadvertently to create an incorrect impression.
As I suggested to the hon. Member for BurySt. Edmunds, when he talked about whether the income of senior citizens and those who had had a short-term stay in another person’s house would be taken into account, the test for the non-dependant is whether his normal residence is with the claimant. If it is not, no deduction is made.
On capping, I have to say to the hon. Member for Inverness, Nairn, Badenoch and Strathspey that if we went for a capping regime, it would cost some£37 million per year. That harks back to the point that every person in a household should make a contribution to its income, and deductions are made accordingly. I hope that I have answered most of the points that have been made. If I have missed any, or if I need to clarify a point of detail, I shall deal with them.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked about non-remunerative work. What we mean by that is somebody working for less than 16 hours a week. I do not know whether that will help him to understand why we have used that term. If a person works more than that, the normal situation will apply.
We have had a fascinating debate, and some genuine issues have been raised. It is important to remember that the Government have frozen the deduction rates since 2000, although the income band widths that determine the rate of deduction have been increased each year. For six years, there has been no increase in the deduction level, although we have expanded the bands. That has been beneficial both to householders and to non-dependant individuals.
I respectfully suggest to the hon. Gentleman that the new clause would break with the general principles that I have outlined. In other words, it is expected that a person who is a member of a household will make a contribution to that household’s running costs. In addition, if the new clause were accepted, some people who at present attract a deduction would not do so. I am not sure whether the hon. Gentleman recognises that. Those two groups would be those in non-remunerative work—those working less than 16 hours a week—and those in remunerative work whose income is less than £101 a week. Members of both groups currently attract a £7.40 per week deduction from the tenant’s housing benefit and a £2.30 reduction from council tax benefit.
It is not clear from the new clause what the intention is regarding non-dependants who are in non-remunerative work and who are in receipt of income support or income-based jobseeker’s allowance. I have assumed that the hon. Gentleman intends that no deduction should apply for anyone in non-remunerative work. With the greatest respect, I suggest that that is rather odd because the new clause would mean that a non-dependant who was on income support and was not working would continue to attract a deduction, but a non-dependant who was on income support and doing some part-time work would not attract a deduction. There is an inherent contradiction in the new clause, unless it is just a typical Liberal Democrat attempt to play both ends off against the middle.
Although the lower rate of deduction in council tax benefit applies to incomes of less than £157 a week, if the intention is to split the current lower income band in two with the dividing line at £101 it would mean that the current lower rate of deduction would apply to weekly incomes between £101 and £157. If the intention is to move the current band threshold from £157 to £101, it would mean that around 10,000 non-dependants with incomes between £101 and£157 would attract increased deductions, up from£2.30 to £4.60 per week. I am not sure whether the hon. Gentleman has appreciated that. Taking all of those factors into account, the cost of the new clause would be £45 million a year. Although I like the idea of ignoring the price tag, in some circumstances we have to look at it.
The Secretary of State already has broad powers in relation to non-dependent deductions. Using primary legislation to set the lower rate would mean that flexibility to review the rate each year would be lost. As people’s incomes increased, as they must under the national minimum wage, more people would attract a deduction. The non-dependent deduction scheme is dealt with through regulations and the Government continue to believe that that is the right place for it.
We have had a fairly lengthy and somewhat detailed discussion of the clause. I hope that I have managed to address most of the points raised. We will certainly scrutinise the contributions of hon. Members. If there is anything I have missed that needs to be clarified I will write to them.

David Ruffley: May I raise two points quickly? The first is about something that puzzles me. Under-25s on income support or income-based JSA are exempt from NDDs, but those of the same age group claiming contribution-based JSA are not. It happens with other benefits too. Why is there this separation for those in the younger age group, in this case the under-25 demographic, between income-based JSA and contribution-based JSA?
My second question is one that the Minister will not be embarrassed to answer because there is no price tag attached, although technically there is one. When will more research on this important area be commissioned by her Department? Is it intended to refresh and renew the research work done in 1996, particularly in view of the disincentives to keep a family together caused by the current regime? The present regime might lead to a perverse incentive for a non-dependent to leave shared accommodation in which they may be lodging or living and applying for their own tenancy, thus putting pressure on housing stock and the Exchequer by giving rise to a brand new housing benefit claim. There is anecdotal evidence that that could be a problem, and any Minister would want to deal with it. Will more research be done? Has any research been done on that? It does not seem to do anyone any good if the current regime is forcing people out of their homes and leading to further householder unit formation, with people having to find their own housing and claiming more housing benefit in their own right.
I shall finish, having asked a grand strategic question about research and made a technical query about the distinction between income-based and contribution-based JSA.

Anne McGuire: I hope that I can tell the hon. Gentleman why the two regimes are different. First, however, I should like to say that we keep our research under review and I would not be surprised if we were considering how to refresh—as the hon. Gentleman said—our research in this field. That is within the Department’s research priorities, into which Ministers may have some input.
On housing break-up because of a deduction, we have to be clear that when a person moves into their own household, the £7.40 deduction is not the only factor—there are many elements that someone needs to take into account in moving. I appreciate what the hon. Gentleman said, but he did say fairly that the evidence was anecdotal. Obviously, however, we will keep an eye on that. As I said to the hon. Member for Daventry, we have to recognise that, if we look at things in isolation, an incorrect conclusion can be drawn because it is based on only one piece of logic, if not evidence.
On the contributory and non-contributory elements of JSA, if the benefit is income-related, we recognise that the individual’s income and capital is low, so there is an element built into JSA that takes account of individuals’ financial circumstances. However, a person can be on contribution-based JSA and not need any additional income support, because they are entitled. If any Committee member needed to do so, they could sign on for JSA as an entitlement because of their contribution record. There are two different circumstances that reflect the fact that within our large social security system there are different ways of supporting people at various points in their lives and in the light of individual circumstances. The new clause opens up a discussion about that sensitivity; nevertheless, I ask the hon. Member for Inverness, Nairn, Badenoch and Strathspey to reconsider and to ask leave to withdraw the motion.

Danny Alexander: I am grateful to the Under-Secretary for that clarification, although I should be grateful if she wrote to Committee members about the regime for under-25s, not least about circumstances where someone might be entitled to both income-based and contributory jobseeker’s allowance.
In her earlier remarks, the Under-Secretary mentioned a particular change that the Government are seeking to make to the non-dependent deduction regime relating to circumstances in which there is more than one householder and one non-dependant, and the way in which the non-dependant deduction is shared between those people. Members of the Committee may wish to reflect further on that point. One possible risk is that it provides an incentive for one householder to wait on the other to notify the Department. There are swings and roundabouts in all these things.
I echo what the hon. Member for Bury St. Edmunds said about research. The Minister said, slightly bashfully perhaps, that Ministers had some influence on the Department’s research programme. I hope that Ministers’ influence on that programme is considerable when they feel that a particular area is ripe for further research.
We have had a good debate, which has highlighted the fact that the NDD regime is ripe for additional research, none having been conducted during the Labour Government’s term of office. The last research took place under the Conservative Government, and Ministers may therefore want to have a fresh look at it.
I share the hon. Gentleman’s concerns about household break-up. I appreciate that many factors are involved, as the Minister said, but that could be usefully addressed in further research by the Department. I hope that it will also be taken into account in designing the Department’s future research programme, with due ministerial influence.

Anne McGuire: Just to clarify the position, as Hansard may show, I appreciate that I said “some” influence; I meant, of course, that we have great influence on the Department for Work and Pensions’ research priorities.

Danny Alexander: I am grateful to the Minister for that intervention. I hope that she will use her great influence to ensure that further research on the matter is conducted.
The Minister made some important criticisms of the amendment. As I said when opening the debate, it was designed to probe the Government’s thinking and I hope that some of the issues that have raised in the debate will be taken further in another place. With that in mind, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 9

Possession action for rent arrears involving housing benefit
‘(1) Section 7 (orders for possession) of the Housing Act 1988 (c. 50) is amended as follows.
(2) In subsection (3), for “subsections (5A) and (6)” substitute “subsections (5A), (6) and (6A)”.
(3) In subsection (4), for “subsections (5A) and (6)” substitute “subsections (5A), (6) and (6A)”.
(4) After subsection (6), insert—
“(6A) If the court is satisfied—
(a) that Ground 8 in Part I of Schedule 2 to this Act is established; and
(b) that rent is in arrears as mentioned in that Ground as a consequence of a delay or failure in the payment of relevant housing benefit, it shall not make an order for possession unless it considers it reasonable to do so.”.
(5) At end insert—
“(8) In subsection (6A) above—
(a) “relevant housing benefit” means—
(i) any rent allowance or rent rebate to which the tenant was entitled in respect of the rentunder the Housing Benefit Regulations 2006(S.I. 2006/213); or
(ii) any payment on account of any such entitlement awarded under Regulation 93 of those Regulations;
(b) references to delay or failure in the payment of relevant housing benefit do not include such delay or failure so far as referrable to any wilful act or omission of the tenant.”.’.—[Danny Alexander.]

Brought up, and read the First time.

Danny Alexander: I beg to move that the clause be read a Second time.
The new clause may be slightly technical but it makes an important point. It would amend ground 8 set out schedule 2 to the Housing Act 1988, with which members of the Committee will be familiar. Private landlords and housing associations can use ground 8 to seek possession of accommodation let on an assured tenancy when a tenant has arrears of more than two months’ rent. Unlike other rent arrears grounds for possession, ground 8 is mandatory: the court has no discretion to decide whether it is reasonable to make an order for possession.
The proposed amendment to ground 8 in the new clause is designed to give the courts discretion in cases where housing benefit issues are outstanding—for example, the court can decide to adjourn the case or to suspend an order for possession. I believe that that will help to ensure that tenants are not evicted from their homes due to non-payment, or delay in payment, of housing benefits.
The Minister will be aware of the present position on delays in housing benefit decisions and the problems that can sometimes cause. The average time taken to process a new claim for housing benefit in 2004-05 was 36 days and the worst-performing authorities took approximately 117 days to process a new claim. I know that those are 2004-05 figures and that the Government have been trying to improve them. In fairness, it is worth noting that one of the benefits of the local housing allowance pilot areas has been the speeding up of administration and the processing of claims. Having said that, if one looks at the different pilot areas, one can see that there is quite a degree of variety in the times taken to process and administer claims.
Certainly, the worst-case scenario of it taking 117 days to process a new claim takes us well beyond the two months’ arrears which currently allows possession to be sought under ground 8. Faced with such an application, the courts would have no choice, even if there was an outstanding housing benefit claim and all the evidence suggested that once that claim was processed, it would result in an award being granted. The way in which ground 8 is framed gives a court no option but to enforce possession. It important to say that under ground 8, a court has no discretion to refuse an order, whatever the reason for the arrears. It is unable even to adjourn the case. Ground 8 is open to private landlords and housing associations that use assured and assured shorthold tenancies but not to local authorities.
The inclusion of ground 8 in the 1998 Act was originally designed to stimulate the private rented sector and to make it easier for private landlords to recover their property. However, since 1993, private landlords have been able to gain possession of shorthold tenancies quickly and without a hearing under section 21 of the 1988 Act. I am sure that the Under-Secretary will be aware of the 2004 case of North British Housing Association v. Matthews, which explored in some detail the problems relating to ground 8, but I shall refresh the Committee’s memory on the point because the case starkly illustrated the problems caused by ground 8.
The housing association brought possession proceedings under ground 8 despite being aware that the tenant had an outstanding housing benefit claim. A county court judge decided that he had no choice but to grant an outright possession order. However,Ms Matthews subsequently received a backdated payment of housing benefit, which completely cleared her arrears and, what is more, put her rent account into credit. The Court of Appeal heard that where ground 8 is involved, the county court had no power even to adjourn the hearing for a short period to await a housing benefit payment. The Court of Appeal was troubled by that situation. Lord Justice Dyson concluded:
“It is a sad feature of contemporary life that housing benefit problems are widespread. To a substantial extent these are no doubt the product of lack of resources. But we do not consider that the non-receipt of housing benefit can, of itself, amount to exceptional circumstances which would justify the exercise of the power to adjourn so as to enable the tenant to defeat the claim. We acknowledge that this conclusion will lead to tenants who are in receipt of housing benefit having no defence to a claim for possession in circumstances where they are not at fault. The statutory scheme is, therefore, potentially draconian in its application.”
That is fair comment on the current powers.
The Under-Secretary, who is, like me, a Member for a Scottish constituency, will be aware that the Scottish Parliament and the Scottish Executive have already introduced measures to prevent the eviction of tenants with rent arrears caused by housing benefit problems. Section 12 of the Homelessness etc. (Scotland) Act 2003 amended ground 8 in almost precisely the same way as is proposed in new clause 9. However, section 12 goes further, requiring the court to have regard to non-payment or delay of housing benefit in deciding whether it is reasonable to make an order for possession under other rent arrear grounds.
The new clause may be technical in nature, but it has important implications. I am sure that everyone in the Committee who is concerned about social justice wants to make sure that where there are administrative problems with housing benefit, they do not leave the court with no choice but to order possession. I therefore hope that the Under-Secretary will accept the new clause, or make it clear that the matter is something on which the Government will table amendments in due course.
I am grateful to Shelter and Citizens Advice for their comprehensive briefing and background information on this important matter, and I look forward the Under-Secretary’s response.

Anne McGuire: I am pleased that the hon. Gentleman has raised these issues. The new clause may be technical but as he indicated, ground 8 can have a serious impact on the life of an individual. It is not used extensively, but he is right to point out that it is in the law and has the potential to be used. I am aware of the case that he highlighted.
The figure of 36 days that the hon. Gentleman mentioned is correct, but we are not sure where the 117-day figure came from. In 2004, the bottom 15 per cent. of authorities took an average of 74 days for processing. We suspect that the figure may have come from the London borough of Hackney, where the local authority took an average of 117 days to process new housing benefit and council tax benefit claims in 2004. That improved to 55 days in 2005-06, and Hackney is now processing claims within 30 days on average. I had the pleasure of visiting Hackney recently and I know that it has invested a great deal of effort in managing the front-of-house and back-of-house operations to ensure that people get the benefits to which they are entitled.
Members of the Committee may be interested to know how their own local authorities have improved their processing. Slough, which I think is the local authority of the hon. Member for Windsor, took an average of 67 days to process new claims in 2004; that figure is now down to 33 days. The Highland council was taking 53 days to handle new claims, which was within the average, but that has now decreased to33 days. South Northamptonshire has gone from 97 days in 2004 to 26 days, which is a tremendous achievement. Caerphilly’s average processing time was 46 days in 2004 and is now 34 days. Waverley, which I understand is the authority of the hon. Member for South-West Surrey, had an average of 81 days, which is now down to 46. Kirklees council, of which we have heard a fair bit in the Committee, has reduced its average time from 49 days in 2004 to 30 days. The star prize goes to Mid-Suffolk, the council of the hon. Member for Bury St. Edmunds, whose average in 2004 was not so fine, at 90 days; that is now down to 32 days. I do not know whether the hon. Gentleman’s interest in housing benefit, which is newly found, as he admitted this morning, has prompted his local authority to improve so dramatically.
We can see that local authorities recognise that they need to deal with the claims quickly. They are working very closely with our Department and sharing experience and good practice.

Tim Boswell: It is genuinely useful for the Committee to hear about some of that experience. The hon. Lady is entirely on the right lines to suggest that the answer to the problem is to encourage local authorities to get on with the job. Although it is now deeply unfashionable on the Opposition Benches to speak up for landlords, I make the point on their behalf that it is clearly unsatisfactory if they cannot get service of rent. If we were to go along the lines of the new clause tabled by the hon. Member for Inverness, Nairn, Badenoch and Strathspey, it would be equally important to ensure that landlords were not disadvantaged. The answer is to get to the root of the problem, whatever we may want to do about the legal shape or form of the sanctions.

Anne McGuire: I am sympathetic to the points that have been raised by both the hon. Gentleman and the hon. Member for Inverness, Nairn, Badenoch and Strathspey, who tabled the new clause. In practice, very few landlords use the ground 8 provision to secure possession. It is fair to say that they, too, are generally sensitive to the financial difficulties that their tenants may face, particularly in relation to delays, which should not happen but sometimes do. Most landlords use the no-fault powers in section 21 of the Housing Act 1988, which allow the landlord to obtain possession of a property without going to court, by giving two months’ notice at the end of a fixed term of tenancy, or after six months of a periodic tenancy.

Kali Mountford: I am exceptionally grateful to my hon. Friend for meeting members of CHAS from Kirklees, whom she kindly mentioned in her opening remarks. Does she recall that, at that meeting, we noted that some people are hidden among those figures? There are still some exceptional cases. Are the Lord Chancellor’s Department and the Cabinet Office still looking at possible remedies to that problem?

Anne McGuire: Not only is my hon. Friend a wonderful MP and a tremendous member of this Committee, but she has just added to her talents, because she can read minds. I was just about to come on the point about the Department for Constitutional Affairs to which she drew the attention of the Committee.
The pre-action protocol for possession claims on rent arrears, which was recently published, as myhon. Friend suggested, by the Department for Constitutional Affairs, applies to social landlords who applied for possession due to rent arrears and includes current good practice in managing rent arrears. It clearly recognises that it is preferable to resolve problems, including those related to housing benefit administration, without resorting to court proceedings. 
The Law Commission produced earlier this year a final report on renting homes, which follows the tenancy review and pertains specifically to the new clause that the hon. Member for Inverness, Nairn, Badenoch and Strathspey tabled. There are many proposals in the report, including the possible abolition of ground 8 for certain tenancies. I am sure that the hon. Gentleman will appreciate that the issue concerns a change to tenure law, rather than to social security law, and that the Bill concerns social security law. In that respect, could I also refer to the situation in Scotland? He is quite right to indicate that there has been a change of policy in Scotland, but again, I emphasise that that is a matter of tenure law and not homelessness or social security legislation.
I understand, however, that the Department for Communities and Local Government is generally supportive of the Law Commission’s proposals. Although it is not yet in a position to comment on how the Commission’s proposals may be taken forward within its wider programme of work, I understand that my colleagues in that Department are looking at opportunities to make legislation at some point in the future. They are therefore keen to hear representations from the stakeholders on all the Law Commission’s recommendations.
Yes, we are sympathetic to the points made by the hon. Gentleman; we recognise that this mandatory ground does not leave any room for flexibility. It has been criticised by judges, as well as by organisations such as Shelter, but this is not the appropriate vehicle for doing that. I hope that he will accept the assurance that colleagues in the Department for Communities and Local Government are looking at the issue. With that, I ask him to withdraw his motion.

Danny Alexander: I am grateful to the Minister for that very positive response, and I trust that she will draw this short debate to the attention of her colleagues in the relevant Departments who are considering the matter. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 10

Circumstances in which a person is treated as occupying a dwelling as his home
‘(1) This section applies where a person is moving from a dwelling at which he qualifies for payment of Housing Benefit to another dwelling at which he will qualify for payment of Housing Benefit.
(2) Regulations may make provisions that such a person may be treated as occupying both dwellings as his home and be eligible for Housing Benefit in respect of both homes for a period not exceeding four weeks if he could not reasonably have avoided rental liability in respect of the two dwellings.
(3) Regulations under subsection (2) may allow for Housing Benefit to be paid in respect of both dwellings for a period exceeding four weeks where the applicant is awaiting the outcome of an application under Part III of the Social Security Act 1988 (c. 7) for a social fund payment to meet a need arising out of the move or in connection with setting up the home in the dwelling.’.—[Danny Alexander.]

Brought up, and read the First time.

Danny Alexander: I beg to move, That the clause be read a Second time.
The intention of the new clause is clear: it would remove the requirement for the claimant to have physically moved into the new home and become liable for rent on two homes. It is to cover the situation in which someone who is entitled to housing benefit on one home is moving to another home where they are also entitled to housing benefit. It would allow the period of four weeks to be extended where applicants are awaiting the outcome of an application for a social fund payment to meet the need arising from the move or in connection with setting up home in a new dwelling.
I am grateful again to Shelter for briefing and information in support of the new clause. The idea is that regulations should be amended to enable a household moving home to claim housing benefit on two properties for four weeks in circumstances in which it continues to have two rental liabilities but has not moved home. At present, housing benefit is paid for rent on two properties only when the household has moved to the new property. We are talking about the period before somebody moves to a new property and has liability for two rents, upon either of which housing benefit would be allowable.
By way of background, I would say that homeless households living in temporary accommodation often accrue arrears because, while they are not able to move into unfurnished, permanent accommodation atthe point at which they accept an offer of new accommodation—perhaps because it takes time to obtain furnishings for the new home—the liability for the rental on the new property cannot be delayed until such issues have been dealt with.
As a result of the anomaly to which I draw attention, the regulations governing entitlement to housing benefits on two homes can contribute to hardship, rent arrears and, sometimes, repeat homelessness. The new clause proposes a simplification of the existing rules to make them more symmetrical in terms of whether the person has moved to the new home during the four-week period. It would substantially improve the situation. I admit—I am sure that the Under-Secretary will say this too—that relatively few people are in such circumstances. Given her positive response to the last new clause, I hope that she can be similarly positive to this one.

Anne McGuire: I thank the hon. Gentleman for raising the issue. I hope that he will accept that the new clause is not necessary because the Social Security Contributions and Benefits Act 1992 already contains the power that it seeks to introduce. The difference is that the existing secondary legislation imposes restrictions in cases in which a customer is waiting for a decision on a social fund application. I shall come to that point in a moment.
Regulations made under the 1992 Act are in force and allow housing benefit to be paid for up to four weeks on the former home as well as on the new home if the customer has an unavoidable liability on the former home. Regulations are also in force to enable housing benefit to be paid once a customer has moved for up to four weeks prior to the date of the move if the delay in moving is due to his waiting for a decision to be made on a claim for a social fund payment in respect of a move, and if he is disabled or aged over 60 or has a child aged under five.

Tim Boswell: I did not want to interrupt the Under-Secretary in the middle of what is clearly an important and complex technical point. However, she seems to be telling the Committee that although the payment relating to the new home could be backdated, it would not, by definition, be available on the first day of moving. Therefore, a tenant in that situation would potentially have a cash-flow problem.

Anne McGuire: That is the exact position, and weare looking to alleviate it. As the hon. Member for Inverness, Nairn, Badenoch and Strathspey says, there are circumstances in which people have difficulties. I know that the local Jobcentre Plus office in his constituency has had problems because the delay in processing community care grants is causing a delay for people in the position that he highlights.
We feel that the measure goes wide enough and that any further widening would be a matter for regulation rather than for primary legislation. Therefore, the issues under discussion are matters for regulation and not for the Bill.

Danny Alexander: I accept the point that the Under-Secretary is making. For the sake of the completeness of the debate, can she give the Committee an idea as to whether, in the light of this conversation, she is of the view that it might be worth while amending the regulations in order to allow the powers to be taken in the way that I describe, as opposed to the way in which they are currently taken?

Anne McGuire: The hon. Gentleman has raised a reasonable point. In the light of the examples that he has highlighted—and, given that we want to consult on the regulations—I hope he would accept that we do not want to disadvantage anybody. I will obviously reflect on this short debate to see whether, in the new regulations, we can accommodate what he admits are unusual but important circumstances for an individual. With those comments, I ask the hon. Gentleman to withdraw the motion.

Danny Alexander: I am grateful to the Under-Secretary for that response. I had not intended to draw particular attention to the circumstances in the local Jobcentre Plus, but she is quite right to draw the Committee’s attention to that as an example of the circumstances that I am trying to describe. I am particularly grateful for her undertaking to reflect further on whether the regulations might need to be updated in the light of some of these circumstances. I am therefore happy to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 11

Interim payment of rent allowance on account
‘Where a relevant local authority has not determined a claim for rent allowance within 14 days of receipt of that claim, in such circumstances as the Secretary of State may by regulation define, the authority shall make a payment on account of rent allowance.’.—[Danny Alexander.]

Brought up, and read the First time.

Danny Alexander: I beg to move, That the Clause be read a Second time.
Again, I will try to be relatively brief but a few points need to be made here, and I hope that our debate will stimulate a further fleshing out from the Under-Secretary of the Government’s position on this important issue. This amendment would put into statute the regulation contained in section 91(1) of the Housing Benefit (General) Regulations 1987. Again, I am sure that I am only refreshing the Committee’s memory of this and I can see that the Under-Secretary is fully informed on this point already. The regulation requires local authorities to make payment on account of a rent allowance within 14 days of receipt, where an inability to make a decision on a case does not arise though a failure of a claimant to provide required information.
This duty exists in secondary legislation, which was the point the Under-Secretary made in response to the previous new clause that we debated. However, in relation to that, Shelter’s housing advice centres—and I am grateful to Shelter for this point in its briefing on new clause 11—report that the requirement is all too often ignored or, in some cases, treated as discretionary by local authorities. The idea here is that placing this obligation in the Bill will reiterate and underscore the vital importance of authorities making payments on account of a rent allowance.
The duty exists to avoid tenants falling into arrears at the outset of a tenancy and risking evictionand homelessness. Prompt payment is, obviously, particularly essential for private sector tenants—and evidence would bear this out—as their landlords are perhaps more likely to begin possession actions at an earlier stage than the relevant social landlord. It is also vital for ensuring that private sector landlords are willing to let to housing benefit claimants in the first place—an issue that I know we debated in one of our previous sittings, when the hon. Member for Colne Valley made particular points about that issue. Along with benefit shortfalls, long delays in beginning payments are cited by landlords as one of the main reasons for not wishing to let to housing benefit—or, in future, local housing allowance—claimants, so proper adherence to this regulation could go a long way to improving the private rented sector’s image of housing benefit, and so improve the ability of tenants to access that sort of accommodation.
It is worth saying that failure to make a payment on account is not considered an official decision, so there is no right of review or appeal. The only recourse for a claimant is judicial review, or to complain to the local government ombudsman. Although either course of action might, in the long run, get a proper remedy, both might cause lengthy delay and further problems for the claimant. Indeed, judicial review is not usually a proportionate form of recourse; it requires legal aid, a solicitor and court time. Also, while the ombudsman does good and worthwhile work, often reaching the right decision in the end, complaining to the ombudsman is not a particularly effective remedy in cases with a sense of urgency, as we would all agree is the position with such cases.
I hope that in her response the Under-Secretary again underscores the importance of following through the regulation consistently. By putting it into statute, we could ensure that all local authorities properly adhered to it so that potential tenants, tenants, benefit claimants and private sector landlords have a sense of security and understanding that the system works in the way in which it is intended to work. I hope that the she responds positively and explains how the Government intend to remedy the problem.

John Penrose: I support the new clause. The hon. Gentleman has made several important points, and some deserve to be fleshed out more for the Under-Secretary to deal with. She gave us examples of how the Government have been pursuing various local authorities so that they shorten the delay that inevitably is incurred from the start of an application until payments come through. The various examples of local authorities that she gave as an illustration were tremendously impressive.
However, Shelter is clear that there is still an enormous variety of performance in different parts of the country. In some cases, authorities are at the worst end of the spectrum, while their neighbouring authorities are at the best end. Landlords, tenants and all of us as taxpayers are entitled to expect continued improvement. Many of the figures that the Under-Secretary quoted were those that had shortened from a 90-plus day delay to a 30-something day delay. They were excellent, but the new clause would make it clear that a couple of weeks is what the man in the street and all of us are instinctively entitled to expect as the usual level of efficiency from our local authority when it deals with such an important issue.
Progress may have been made, but there is still a fair distance to go and an unacceptable wide variety of performance in respect of the average figures that have been quoted to us. Those variations create a number of effects, such as hardship for tenants, examples of which we were given when discussing earlier clauses. The variety of performance also has a negative effect on landlords and on the supply of particular types of accommodation in the market. We have discussed the baleful effect of constrictions in supply in such matters and, thus, on tenants, which implies that a huge amount of work is still to be done.
If, for whatever reason in the future, the performance of local authorities either collectively or individually goes backwards and gets worse, which, goodness knows, given the burden of history might sadly be the case, we need to have a way to protect tenants from negative performance. We also need to ensure that a sword of Damocles is hanging over local authorities so that they know they will not receive a cash flow benefit from acting slowly and not performing. The new clause is vital, partly because it would give tenants a degree of certainty and a reasonable length of time that they are entitled to expect before their money comes in. It would also mean that local authorities do not have an incentive to allow their performance to slide. In fact, they would have a disincentive.

Jeremy Hunt: Does my hon. Friend agree that one of the factors that can make the process take much longer than it should is the complexity of the assessment process? My hon. Friend the Member for Daventry sensibly referred to the minimum constraints and the Government making swifter progress in the sharing of information. If there were much better sharing of information, and hence sharing of verified information that the local authority could trust when making its assessment of entitlement to housing benefit, we would then be able to speed up the process considerably and achieve the important two-week period.

John Penrose: My hon. Friend is exactly right, and his is a good example of a wider issue. If one is going to shorten the times much further, it will not be enough to act like a football coach on the sidelines and just shout louder and ask people to work harder. That will not achieve a delay time of two weeks or less, because other things have to be done too. Among them is a series of efficiency measures, some of which are concerned with the exchange of verifiable information, as my hon. Friend says. In addition, and wherever possible, processes and indeed benefits themselves should be redesigned—as attempted by many measures in the Bill—to make the intrinsic process simpler and faster. My hon. Friend the Member for Bury St. Edmunds spoke about attempting to achieve greater simplicity. If that can be designed into the system, it inevitably makes it far easier for the people who are working to achieve such goals.

David Ruffley: I wonder whether my hon. Friend misspoke. He said that I wanted to achieve simplicity, but of course that is in relation to the benefits system, not in relation to any part of my professional life.

John Penrose: I thank my hon. Friend for that correction.
The new clause is important because it would give a guarantee. From the tenant’s and the landlord’s points of view, and also from the point of view of the market, it is important to deliver greater supply of suitable accommodation.

Jeremy Hunt: Does my hon. Friend agree that the difficulty in the process of obtaining housing benefit acts as a work disincentive—for example, people might feel that on taking paid employment they would lose housing benefit, which would be difficult to recover should they fall on hard times? The complexity and the difficulty in benefits application procedures are themselves the cause of the benefits trap. Addressing that would result in my hon. Friend’s arguments having much wider benefit in encouraging people to move, when possible, back into the world of work.

Jimmy Hood: Order. I have been generous in allowing the hon. Gentleman to make two long interventions, but they should be shorter.

John Penrose: Thank you, Mr. Hood.
I agree with much of what my hon. Friend said. The benefits of benefit simplification, rather than just straightforward simplification, go wider than mere cost reduction and shortened lead times. One such benefit is that it is unquestionably easier for people to access the benefits system. That is the case for housing benefit applications, and I am sure that there are other applications, which we will not consider today, that would nevertheless benefit from simplification. Simplification has greater benefits than just cost reduction and process efficiency. Behavioural benefits in how people react when they try to access the benefits system are a vital part of that. The Opposition support the new clause, and I hope that the Minister will respond to those points.

Kali Mountford: The Committee owes the hon. Member for Inverness, Nairn, Badenoch and Strathspey a debt of gratitude for the way in which he has concentrated on the new clauses. He rightly focused on the circumstances of individuals, their ability to pay rent on time, and the effect that that has on their lives. However, we should concentrate on ensuring that assessments are made quickly and are right first time, with a proper means for reassessment. That, I am afraid, takes us back a little to previous debates, in which I expressed the differing opinion that there may be a better way of getting the same effect.
The hon. Gentleman told the Committee that the measure can be implemented by regulation, but that he wants to see it in the Bill. However, I want a set of regulations that are thought through properly and work well together. I am making a bid for regulations that would fit alongside the provisions in the Bill and, in particular, that help to make decisions right first time and speedily.
I direct the Committee to our previous discussions on what rent officers do, how transparent their work is, and how well they work with other parts of local authorities and other agencies. I make a plea to my hon. Friend the Under-Secretary to think back to our discussions when she so kindly met me and the director CHAS Kirklees. We were thinking about improving the process so that decisions could be made speedily and more openly to ensure that information can be made available to everybody in the way in which, I think, the hon. Member for South-West Surrey indicated. If all the information is pulled together and open, and is readily available at the beginning of a process when housing allowance is set for an area, it would do a great deal to help speed up the process.
I am not saying that I do not want that measure available to local authorities, but I would like time to be made available for proper consideration of regulations and orders in further Committees to ensure that those other measures are available and are considered together. I make a second plea to my hon. Friend that during further consideration of the Bill, perhaps when it goes to the other place, she has another look at the recommendations and perhaps comes back to the House, either on Report or Third Reading, with proposals.

Anne McGuire: I thank hon. Members for their contributions. I am sure that the hon. Member for Inverness, Nairn, Badenoch and Stroganoff—sorry, it must be getting near lunch time; I meant to say Strathspey.
The hon. Gentleman probably expects me to say that the proposal is unnecessary because the power that he envisages is already in section 5(1)(r) of the Social Security Administration Act 1992, but having said that, he raises an interesting issue and one that is worthy of being aired in Committee.
The hon. Gentleman had the Committee’s support when he said that we want to protect tenants against accumulating rent arrears and, obviously, facing possible eviction even when they have fulfilled their side of the bargain by making an effective claim and providing the local authority with all the information that it needs to decide the claim. I think that that links in to some of the points made by my hon. Friend the Member for Colne Valley.
As I pointed out earlier, we have seen a dramatic improvement in the processing of housing benefits claims, as the hon. Member for Weston-super-Mare indicated. We recognise that a minority are still taking too long to process claims, which can lead to problems for the tenant. That is not what we want. Individuals should not be in the middle of a process that is designed to help them but, because of various failures, either bureaucratic or by individual professionals, instead leaves them with a liability to pay rent that they palpably cannot afford to do while they await their housing benefit claim.
As the hon. Gentleman clearly said, that is why we have the existing requirement for a payment on account when an authority is unable to decide a claim within 14 days, subject to the customer having provided all the necessary information. In some cases, the requirement would be more stringent than the one that he seeks because the date of the claim can precede that on which the claim was received. There is that nuance within the new clause.
As hon. Members have recognised, we are focusing our efforts on further improving authorities’ speed of decision making and the making of the first payment of housing benefit through inspections, quarterly monitoring and the setting of performance standards. We are dealing with 408 local authorities. Trying to get them to work to a set of standards where they have their own statutory responsibility for implementation has not always been easy.
We are also simplifying the housing benefit administration to speed up the processing times, for example through the local housing allowance. The hon. Gentleman’s proposal does not fit well into the increasing trend for housing benefit claims to be received by the Department for Work and Pensions. Around two thirds of housing benefit applications are currently made to the DWP initially. The local authorities do not become part of that process until later on. Increasingly, our intention is for both Jobcentre Plus and the Pension Service to offer customers a one-stop shop for benefits where claims to all benefits and information are provided and, in most cases, verified by a single process. The aim is to make the process more straightforward so that people do not have to go from one Department to a local authority and perhaps carry information back to another Department.
Increasingly claims for information will be gathered by the Department and then forwarded to the local authority. That is the point that my hon. Friend the Member for Colne Valley was highlighting. We want a process that is efficient and effective, that gathers the right information at the right time and gives the correct decision at the right time. That is what important to the individual claimant. While I am on the subject of my hon. Friend’s contribution, yes we want the housing benefit process to be as open as possible, consistent with protecting the independence of the rent officers. That came up in the discussion with my hon. Friend and her constituency organisations.
Because we are now gathering the information in the Department more and more through Jobcentre Plus and then forwarding it to the local authority, we recognise that local authorities need to wait for the information. But the pay-off for the local authorities and the individual is that, in many cases, most of the information will be fit for purpose. In other words and harking back to what my hon. Friend said, the local authority will have the information to make a decision on the claim at that first point. That is obviously something that we would all support.

Kali Mountford: I know that when we had our discussions with CHAS Kirklees, the Under-Secretary seemed surprised that some local authorities are a bit more restrictive in sharing information than she expected. Is she willing to look again at advice notes, guidance or regulations that might free up some of that information to make it the efficient method that she seeks?

Anne McGuire: My hon. Friend reflects the discussion that we had with CHAS, and the answer is yes. Consistent with protecting the independence of the assessment process so that rent officers are not unduly influenced either by the local authority, stakeholders or the private sector landlords, we want to see as much engagement as possible. I am happy to reiterate the commitment that I gave to her in private.

Danny Alexander: I am grateful to the Under-Secretary for describing the administrative improvements. I appreciate that a lot of hard of work is going into that and improvements are being made, not least through the one-stop shop approach. In cases where the benefit information is collected and processed by the DWP, Jobcentre Plus or the Pension Service and then forwarded to the local authority, does the 14-day rule also apply to the DWP and its agencies in the collection and processing of this information or does the clock start only when that information reaches the local authority? In terms of allowing for the interim payment of rent on account in the way that the regulations currently describe, that is an important point.

Anne McGuire: It is an important point and I hope to give the hon. Gentleman a definitive response to it during the debate. I put on record that more than80 per cent. of claims are dealt with within 14 days from the date of the claim when all the information has been provided by the customer. Every effort is made to ensure that the customer gives the information necessary, and some of the time scales reflect the fact that sometimes customers are not forthcoming with that information. The blame for delay in the process does not always fall on the local authority or the Department for Work and Pensions. As we said during the debates on the housing benefit clauses, we are determined to ensure that local authorities who have statutory responsibility for the operation of our housing benefit policy improve their game, as many have done.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked when the 14-day clock starts ticking. It starts from the date of the claim, which can be at the time when the claim is received by the DWP. I hope that that reassures him. A quick decision depends very much on the co-operation of the individual making the claim in responding to the request for information.
Our wider policies and approach on performance improvement, coupled with existing safeguards on the 14-day interim payment, are of greater benefit to customers than introducing more pre-decision requirements. To be frank, they could distract authorities from the main priority: getting decisions on claims made accurately and on time, a matter that was highlighted by my hon. Friend the Member for Colne Valley and by Opposition Members.
With those points of clarification, I hope that the hon. Gentleman will consider withdrawing his new clause. Once again, I thank him for raising an important issue, which allowed us to reflect on the improvements that need to be made to the process. I am sure that the officers of the 408 local authorities are hanging on our every word on this matter.

Danny Alexander: I am grateful to the Under-Secretary for her response, which rightly emphasised the ongoing efforts to improve the speed of administration. I recently took part in a conference on working age benefits with the Minister for Employment and Welfare Reform, who said that, in relation to working age benefits, even a two-week processing time was too long and asked why benefit claimants should have to wait two weeks for decisions that in the private sector would be made in a matter of days. I am not sure that it was a target, but it may have been a long-term aspiration and if that is the context of the Government’s overall thinking on the issue, it is to be welcomed.
The reasoning behind the new clause relates to the cases of a minority of claimants in which the Minister’s aspirations were not met. I appreciate the points made by the hon. Member for Colne Valley and the Under-Secretary’s remarks, with one proviso: I hope that she will use the full power of her ministerial office to remind local authorities of their obligations under the existing regulations. My point was less about the rectitude and value of current regulations and more about their non-observance by many local authorities. Perhaps the Under-Secretary or the Secretary of State could issue a stern reminder to local authorities oftheir obligations under the regulations. With that imprecation, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 16

Local Housing Allowance: transitional arrangements
‘Regulations may make provision for those in receipt of Housing Benefit to be entitled to claim Local Housing Allowance from the coming into force of this Act.’.—[Danny Alexander.]

Brought up, and read the First time.

Danny Alexander: I beg to move, That the clause be read a Second Time.
This new clause relates to the treatment of awardsof existing housing benefit. Schedule 4 provides for regulations that will make provision for the transition of those people receiving incapacity benefit on to the employment and support allowance instead. However, the Bill includes no similar provision in relation to housing benefit, so I look forward to the Minister’s response.
In her previous remarks, the Under-Secretary made it clear that the Government’s intention is that the new local housing allowance system should apply to new claimants only and that it is not their intention to remove people who are in receipt of housing benefit to the new local housing allowance. The new allowance will be rolled out on a new claims only basis. Ministers have made clear previously that, after two years, the Government intend to review the situation and consider transferring any remaining claimants on to local housing allowance.
I am grateful to the Citizens Advice, in particular, for its comments on this proposal. There are a number of potential criticisms to which I look forward to hearing the Minister’s answer. First, that this is an untested approach. Under the local housing allowance, two approaches to implementation were piloted. The phased approach meant that new claims were transferred on to the local housing allowance immediately and existing claims were transferred gradually when their claim was reviewed or renewed. Secondly, in another of the pathfinder areas, there was a big-bang approach. All the claims were transferred from day one. Both approaches were extensively assessed in the DWP’s evaluation of the pathfinder areas, which runs to several volumes. I know that every word of them will have been studied by members of this Committee.
For the natural roll-out, the DWP is now proposing a third approach that has not had the benefit of having been piloted or assessed in any of the pathfinder areas. In his response, could the Minister set out what lessons the Government drew from the evaluation of approaches one and two which have led him—if he will pardon my choice of phrase—to choose a third way in relation to the transitional arrangements?
The proposed implementation approach could be seen to undermine one of the key principles thatwould guide the development of the local housing allowance—the promotion of greater fairness. Under the Government’s proposals, similar households with identical incomes and rent levels may end up receiving different levels of housing benefits for an undefined period of at least two years. Some claimants may face a shortfall between their benefit and their rent, whereas others in identical circumstances might receive an excess.
In addition, local authorities will be required to keep the two systems of administration running in parallel. The hon. Member for Colne Valley has made repeated references to the need for rent officers to be more open. I fully agree with that, but if rent officers are going to be asked to provide information for two systems that will run in parallel for at least two years for existing claimants versus new claimants, one suspects that there is another difficulty facing that particular group of people. I look forward to hearing from the Minister how that is being thought through and why this conclusion has been reached.
That relates to another point that I hope the Minister will address. Where the local housing allowance results in a higher level of benefits, there will be a risk that some landlords—and I appreciate that this may only apply to a small minority of them—may seek to evict the existing tenants in order to let to new tenants on the higher rate of the new benefits. Although that may only apply in a small minority of cases, it is a risk that has to be weighed in the balance in relation to these transitional arrangements. It is worth noting that some citizens advice bureaux, working in the pathfinder areas, have reported many cases of landlords increasing their rent up to—

It being One o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at Four o’clock.